This networking company beat analyst’s projections by $0.17 last quarter, and the shares recently crossed over their 50-day moving average, a bullish indicator.
Netgear Inc. (NTGR)
From Ford Equity Research Report
Netgear Inc. (NTGR) is a networking company whose products consist of wired and wireless devices that enable networking, broadband access and network connectivity. The company’s business is managed in three units: retail, which consists of home networking, home video security, storage and digital media products; commercial, which includes business networking, storage and security solutions; and service provider, which contains whole home networking hardware and software solutions, as well as 4G LE hotspots. The company is organized into three geographic territories: Americas, Europe, Middle-East and Africa, and Asia Pacific.
Earnings Strength is VERY POSITIVE
Ford’s earnings momentum measures the acceleration or deceleration in trailing 12 month operating earnings per share growth. While Netgear Inc.'s earnings have increased from $1.91 to an estimated $2.14 over the past 5 quarters, they have shown strong acceleration in quarterly growth rates when adjusted for the volatility of earnings. This indicates an improvement in future earnings growth may occur.
Earnings forecasts for Netgear have been unchanged, which indicates that expectations of future earnings growth remain steady. The company has also reported higher earnings than those predicted in earlier estimates, indicating an ability to exceed analysts’ expectations and the potential for improving earnings growth in the future.
Relative Valuation is POSITIVE
Netgear Inc.’s operating earnings yield of 5.3% ranks above 63% of the other companies in the Ford universe of stocks, indicating that it is undervalued.
Price Movement is VERY POSITIVE
Netgear Inc.’s stock price is up 23.2% in the last 12 months, down 3.3% in the past quarter, and up 0.2% in the past month. This historical performance should lead to above average price performance in the next one to three months.
We project that NETGEAR will strongly outperform the market over the next 6 to 12 months. This projection is based on our analysis of three key factors that influence common stock performance: earnings strength, relative valuation, and recent price movement.
Richard Segarra, CFA, Ford Equity Research Report, www.fordequity.com, 800-842-0207, April 1, 2016